INTRODUCTION
A residential real estate sale transaction usually begins at the time a broker obtains an agency contract in the
form of a listing from the property owner. When a buyer is found, the transaction proceeds through several
interrelated processes:
Concluding the sale. Buyer and seller agree to terms. The agreement and joint escrow instructions are
fully executed and unqualified acceptance is communicated. This is the result of sales effort, negotiation
and communication.
Legal transfer of title. Title insurance or title evidence has been furnished and escrow has the funds
necessary to cash out the seller’s equity, less expenses. All instruments necessary to transfer title are
executed and recorded. Transfer of title and transfer of money are thought of as simultaneous acts.
Completing the financing and providing the final settlement statement. Completing the financing is
closely related to the legal transfer of title but with more emphasis upon the settlement function: i.e., the
actual disbursement of funds by checks and a written accounting to all parties. In a complicated transaction
involving new financing, besides the buyer and seller, there may be prior lenders and a new lender. To
show the instructions of the escrow have been fully performed, the escrow holder will prepare an
accounting of the transaction by providing a settlement statement for the principals.